Updated at 7:39 p.m.
Gov. Phil Scott on Tuesday proposed using eight distinct pots of money to hold down property taxes in 2019, and unveiled a plan he says would cut school spending and keep property taxes level for another five years.
The governor wants lawmakers to approve the two-part package during the final two weeks of the legislative session.
To find the $58 million needed to avert a property tax increase, Scott would turn to one-time expenditures. Nearly $20 million would come from an unexpectedly large tobacco settlement, much of which lawmakers have already allocated to other programs. The administration is also counting on another $20 million in expected surplus revenue, and it wants to borrow $7 million from the state’s general fund reserves.
Tax Commissioner Kaj Samsom told reporters that transfers from the general fund to the education fund would be paid back over five years.
Still, House Speaker Mitzi Johnson (D-South Hero) and Senate President Pro Tempore Tim Ashe (D/P-Chittenden) expressed skepticism about relying on such a large amount of one-time funds.
“We worked long and hard to make sure that one-time money was not being applied to ongoing expenses,” Johnson said. “That’s the kind of practice that got us into a lot of trouble.”
“The Senate, for sure, will have to think long and hard before it uses $58 million of one-time [money] to artificially buy down rates for one year, knowing what the alternative uses of those dollars could be,” Ashe said. He did, however, suggest that the Senate would be open to using some one-time money to compromise with the governor.
Legislators turned to such funds last year to resolve a standoff with Scott, who unsuccessfully sought statewide health insurance negotiations for teachers. That use of one-time money is partially responsible for the 2019 tax increase that officials are now trying to offset.
The cost-cutting portion of the governor’s proposal hinges on increasing student-staff ratios in schools, which the administration says would save $262 million over five years, but it doesn’t offer a mechanism to ensure that happens. Last week, Scott proposed imposing tax penalties on districts that don’t meet the ratio, but he has since backed off that idea. Tuesday, his administration proposed simply creating a task force that would strategize with local school districts this summer about how to achieve higher ratios.
Commissioner of Finance Adam Greshin said the administration is confident it can achieve the savings, stating, “These are pretty conservative numbers.”
Anticipating lawmakers’ criticism that the administration is again dropping a major proposal at the tail-end of the session, Secretary of Administration Susanne Young emphasized that many of the proposals in the governor’s plan aren’t new.
“We’re very enthusiastic about the fact that we have drawn on bipartisan ideas,” she said.
Questioned about whether increasing student-staff ratios could force some schools to close, Young acknowledged, “it very well could be closing some schools and merging more schools physically.”
The other proposals include, once again, creating a statewide teachers’ health insurance contract and changing how the state distributes special education funding — two steps the legislature was already considering. Scott’s plan would also lower the excess-spending threshold — which penalizes high-spending school districts — and change a program that allows people to pay taxes based on income rather than home value.
Senate Education Committee chair Phil Baruth (D/P-Chittenden) suggested the governor’s plan was unrealistic given the time remaining. “We’re already up to our necks with two of [the proposals] and we only have two weeks left. So adding ratios and the excess spending — adding those, I think, begins to push it into the realm of more than human beings can accomplish in two weeks.”
At the end of the day, Senate Democrats convened to discuss Scott’s proposal. It did not go over well.
“To go through this a second year in a row? It’s not right,” said Sen. Dick Sears (D-Bennington).
Sen. Mark MacDonald (D-Orange) suggested that the proposal to buy down property taxes was counterproductive to the governor’s own goals because it would insulate voters from the impact of their school budget decisions. “It’s blowing the system up,” he said.
“It’s absurd that we would even begin to look at this at this point,” Sen. Dick McCormack (D-Windsor) said, adding later, “I’m going to put this in my summer reading file.”
Sen. John Rodgers (D-Essex/Orleans) called the late-stage unveiling “horse hockey.”
“Don’t fall into the political trap,” he warned his colleagues.
Taylor Dobbs contributed reporting.
Disclosure: Tim Ashe is the domestic partner of Seven Days publisher and coeditor Paula Routly. Find our conflict-of-interest policy here: sevendaysvt.com/disclosure.
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Yet again, our governor fails at fiscal responsibility by kicking the can down the road to pay for programs. In my community, our school boards are responsive to cost cutting measures. The act 46 merger has been adopted and takes money to implement well for future savings. There have been high numbers of RIFs which are hard. The governor needs to come to the table and make some hard decisions to cut costs, not make lofty fiscally irresponsible mandates if he really wants to reduce taxes.
I agree entirely with Chelsea Rose Smiley. If the governor wants to cut spending, he should make specific proposals to do so, not maintain current spending levels with unsustainable revenue sources and vague proposals for areas to consider cutting. His gimmicks may be good politics, but they make lousy policy.
Taxes are the price we pay for the spending we require. Either shut up and pay up, or figure out specifically what you want to do without. This tiresome refrain of “don’t raise taxes” while simultaneously refusing to cut spending is grossly irresponsible and should fool no one.
Meanwhile, we COULD make Vermont’s tax system a good deal fairer than it is by using the income tax to insure that those who have received the greatest economic benefits pay at least as much of their income in overall taxes as everyone else. Failure to do so is morally scandalous.
Legislators may not like the Governors plan to prevent taxes from going up, but can someone please explain to me what they have done other than shift costs from the property tax to the income tax?
The Gov seems to have a 5 year plan to reduce the cost of education, Ashe and others appear clueless long term and predictably resort to raising taxes.
And were the transfers made by Douglas and Shumlin from the education fund to the general fund ever transferred back? “Unexpected” tobacco revenue? Not exactly budgetary planning. “If you don’t know where you are going, any road will get you there.” ~ Lewis Carroll
“I agree entirely with Chelsea Rose Smiley. If the governor wants to cut spending, he should make specific proposals to do so, not maintain current spending levels with unsustainable revenue sources and vague proposals for areas to consider cutting.”
The Legislature approves the state’s spending plan, so the Legislature has as much responsibility for keeping spending under control as the Governor. You say, if the Gov wants to cut spending, the burden’s on him. Howabout, if the Legislature wants to fund a program, the burden should be on them to justify it.
In addition, I disagree with your statement that the Gov. isn’t specific enough. I think he is. You just don’t like to see spending cut at all, so you gripe.
Shumlin supposedly refused to raise taxes either.
The costs of merger incentives were never really understood. Now schools must be punished again,
to pay for merger costs. The teacher/student ratio plan has no validity unless studies are conducted to show how it could be implemented. Clearly the cuts are designed to to close small schools. Yet no one can really say that money will be saved, nor can anyone really say that students will be better served with this
“one-size-fits-all” ,no matter how many miles a child must travel to attend school. The loss of yet more middle-class ( just clinging to middle class) teaching positions will not enhance local economies. And the every growing number of emotionally disturbed children coming from the opioid crisis will only add to the cost of education. Is Vermont ready for this? Will long, unsupervised bus rides help these students?
Typical Vermont, kick the can down the road.
None of them have a clue what they are doing and only thing they can seem to get done is per projects. Attacking the second amendment, legalizing marijuana and money for druggies.
The Vermont education system is top of the list for spending and middle of the pack for results.
The average person in this state is taxed to death. Something has to change. No other company or business would continue down this road. The Vermont enrollment is down 25%, time for cuts.